Bank account credit check

jessie4109

Just a question that popped into my head yesterday, why do banks perform credit checks for accounts even when you are not applying for any actual credit?

You-kip

jessie4109 wrote: »

Just a question that popped into my head yesterday, why do banks perform credit checks for accounts even when you are not applying for any actual credit?

Because current accounts come with Overdrafts which is Credit!!

jessie4109

what if you explicitly say you don't want an overdraft eg a cash card type of account

rabbit_burrow

Some may not be done as a 'credit' check, but as an 'identity' check.

IainHL

As rabbit_burrow says, for a basic bank account (no overdraft facility), the banks will generally perform a check with a CRA to confirm your identity, in particular that you are on the electoral roll at your address.

You-kip

Banks will perform a full current account credit check and will offer you a basic one if you're unsuccessful for the full account.

rabbit_burrow

You-kip wrote: »

Banks will perform a full current account credit check and will offer you a basic one if you're unsuccessful for the full account.

If you apply for a basic account, i thought they couldn't credit check for a full account as it may be classed as checking for a credit application without the applicant's consent?

Gordon_Hose

jessie4109 wrote: »

what if you explicitly say you don't want an overdraft eg a cash card type of account

Then you'll be applying for a basic account which involves an identity check, not a credit check.

jessie4109

Can you get failed for a basic one then if its just an identity check?

izools

Some banks have policies of not opening accounts for people with undischarged insolvency proceedings against them.

They also need to see whether the applicant has any CIFAS (Fraud) or GAIN (Gone away information network) markers against them.

A simple ID check doesn't reveal this.

Maestro.

You-kip wrote: »

Because current accounts come with Overdrafts which is Credit!!

To be honest, not all current accounts do. However, can't think of any current account which doesn't carry with it the availability of credit, some of which will at times be " pre approved". For instance, I had a current account for years with no OD facility. I asked for one and got it, but without asking I, and probably most customers of that bank, wouldn't have ever got one.